NCPA - National Center for Policy Analysis


June 14, 2006

In the competitive world of summer internships, a new route to plum spots is emerging: buying them at auctions, often at elite private schools, says Ellen Gamerman of the Wall Street Journal.

In the spring of 2006, internships at Morgan Stanley, NBC, Miramax, WebMD, Electronic Arts and a host of other companies were put out to bid at auctions across the country, with bids ranging from $2,000 to $5,000. Schools say these internships have strong appeal at charity auctions with parents who seem them as resume builders for college applications, while companies say they view these internships as charitable contributions with a unique return: mentoring young talent from top schools, says Gamerman:

  • This auctioning of internships reflects the convergence of two trends: ever-expanding fund-raising efforts at private schools, and parents' obsession with getting their kids into the right schools and eventually the right jobs.
  • In some cases, it also stems from competition among parents to donate the most attention-grabbing auction items.
  • However, connections have long played a role in getting internships and putting them up for sale can mean discounting the merit of a potential intern altogether, and excluding kids whose parents can't afford the items.

Moreover, companies' rules about donating internships vary; some say requests to donate must go through human resources and are reviewed, others bypassed all barriers and just appear, says Gamerman.

But, tax lawyers say a company would not likely claim a paid or unpaid internship as a tax-deductible contribution because the intern is doing work that is presumably benefiting the company, not the charity, and labor lawyers say auctioned internships aren't likely to raise issues different from those associated with standard programs -- both must adhere to federal and state minimum-wage laws, says Gamerman.

Source: Ellen Gamerman, "Internships For Sale," Wall Street Journal, June 10, 2006.

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